09:34     SHOUGANG INT'L<00697> - Announcement (1)                            

    The Stock Exchange of Hong Kong Limited takes no                          
    responsibility for the contents of this announcement, makes               
    no representation as to its accuracy or completeness and                  
    expressly disclaims any liability whatsoever for any loss                 
    howsoever arising from or in reliance upon the whole or any               
    part of the contents of this announcement.                                
                                                                              
    SHOUGANG CONCORD INTERNATIONAL ENTERPRISES COMPANY LIMITED                
    (Incorporated in Hong Kong with limited liability)                        
    (Stock Code: 697)                                                         
                                                                              
    CANCELLATION OF SHARE PREMIUM AND                                         
    CAPITAL RESERVE ACCOUNTS                                                  
                                                                              
    The Directors announce that the Company proposes to cancel                
    the amount standing to the credit of the Company's share                  
    premium account and capital reserve account. The credit                   
    arising on the Cancellation will be applied, to the extent                
    permitted by the High Court, principally, in writing off the              
    accumulated losses of the Company as at 30 June 2004.                     
                                                                              
    The Cancellation is conditional on the approval of the                    
    Shareholders in general meeting, the confirmation of the                  
    High Court and certain registration requirements.                         
                                                                              
    A circular containing further details concerning the                      
    Cancellation and a notice convening an extraordinary general              
    meeting to approve the Cancellation will be despatched to                 
    the Shareholders on 20 May 2005.                                          
                                                                              
    INTRODUCTION                                                              
    The Directors announce that the Company proposes to cancel                
    the amount standing to the credit of the Company's share                  
    premium account and capital reserve account. This is                      
    expected to give rise to a credit of approximately HK$3,213               
    million based on the Company's share premium account and                  
    capital reserve account as at 31 March 2005. Such credit will             
    be applied, to the extent permitted by the High Court, in                 
    writing off the accumulated losses of the Company, of                     
    approximately HK$2,920 million as at 30 June 2004 (the                    
    "Accumulated Losses"). The remaining balance of                           
    approximately HK$293 million of the credit arising on the                 
    Cancellation will be transferred to a special capital                     
    reserve to be created by the Company, the application of                  
    which will be subject to such conditions as are imposed by                
    the High Court.                                                           
                                                                              
    As at 31 March 2005, the Company's share premium account and              
    capital reserve account stood at approximately HK$1,413                   
    million and HK$1,800 million respectively. The former sum                 
    has arisen as a result of various issues of Shares by the                 
    Company at a premium accrued pursuant to section 48B of the               
    Companies Ordinance. The latter sum has arisen as a result                
    of the reduction of the Company's share premium account in                
    November 1993.                                                            
                                                                              
    CONDITIONS                                                                
    The Cancellation is conditional on the following:                         
                                                                              
    (i)   the passing by the Shareholders of a special                        
    resolution in general meeting to approve the Cancellation;                
    and                                                                       
                                                                              
    (ii)   the confirmation of the Cancellation by the High                   
    Court and the registration by the Registrar of Companies in               
    Hong Kong of an office copy of the order of the High Court                
    and the minute containing the particulars required by                     
    section 61 of the Companies Ordinance.                                    
                                                                              
    Assuming that the above conditions are fulfilled, the                     
    Cancellation will become effective immediately following                  
    the registration of the order of the High Court and the minute            
    referred to at (ii) above.                                                
                                                                              
    The effective date of the Cancellation cannot be ascertained              
    at present. An application will be made to the High Court                 
    in respect of the Cancellation as soon as practicable after               
    the approval of the Cancellation by the Shareholders and                  
    further announcement(s) will be made informing the                        
    Shareholders of the expected effective date of the                        
    Cancellation and, as necessary or appropriate, the progress               
    and results of the application to the High Court.